Mk Loan Extension Is Granted

The depressed stock of financially beleaguered Morrison Knudsen Corp. rebounded somewhat on Monday following the announcement that the one-time engineering giant had won a reprieve from its creditors.

Shares in the 83-year-old Idahobased corporation closed at $6.50 Monday after slipping below $5 for the first time ever late last week as the company reached an agreement that extended its loans until July 31.

“We remain on the critical list, there’s no doubt about that,” Chairman Steve Miller admitted.

Key to regaining some financial stability will be Miller’s success in finding a buyer for Morrison Knudsen’s 65 percent share in the rail transit company that is responsible for hundreds of millions of dollars of its recent losses.

Miller said there has been some interest in the company’s share of MK Rail, but he declined to identify the companies.

Corporate officials did announce on Monday that it had signed an agreement with owners of a Wyoming-based air operations company for sale of Western Aircraft Inc.

Morrison Knudsen President Robert Tinstman said the deal with Satellite Aero Inc. owners Al Hilde and Allen J. Hoyt should “generate several million dollars in cash proceeds.”

The company had earlier announce agreement to sell 9 million shares of MK Gold Co. to an insurance company, all part of its plan to unload noncore business to bail itself out of a sea of red ink.

Miller, who took over the company on April 1, acknowledged that the corporation’s 28 banks and bonding companies remain nervous about the future when they agreed to another two-month waiver on loan covenant defaults. But he said they were apparently not ready to foreclose on $122 million in debts or push Morrison Knudsen into bankruptcy.

Miller, who replaced ousted Chairman William Agee and has spent eight weeks trying to right the corporation, would not rule out the possibility Morrison Knudsen would seek protection bankruptcy from its creditors.